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FedEx 3Q earnings tumble 75%
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<blockquote data-quote="moreluck" data-source="post: 542545" data-attributes="member: 1246"><p><strong>FedEx to take Q4 $900mln charge as recession bites</strong></p><p></p><p>Wed Jun 3, 2009 5:16pm EDT</p><p>* $900 mln goodwill charge, mostly for FedEx Kinko's</p><p>* Charge due to weak economic conditions</p><p>CHICAGO, June 3 (Reuters) - FedEx Corp said on Wednesday that it would record a fourth-quarter impairment charge of $900 million related to two acquisitions that have been hit by weak economic conditions.</p><p>The majority of the charge is related to Kinko's, which FedEx bought in 2004 and has been seen as a disappointment by the package delivery giant.</p><p>FedEx's announcement came in a regulatory filing with the U.S. Securities and Exchange Commission.</p><p>The Memphis-based company said it would record a non-cash goodwill charge of $810 million for the quarter ending May 31 for the home office supply chain, which it bought in 2004 and re-branded first FedEx Kinko's and more recently FedEx Office.</p><p>Kinko's has not performed well under FedEx, which analysts have attributed to the fact that it lies outside the package delivery company's area of expertise in the world of shipping.</p><p>The remaining $90 million of the goodwill charge is related to the acquisition of less-than-truckload company Watkins Motor Lines -- now known as FedEx National LTL -- in 2006.</p><p>Less-than-truckload companies consolidate smaller loads into a single truck. FedEx's acquisition of Watkins was welcomed by analysts at the time. But the business has suffered along with the rest of the U.S. trucking sector, which has struggled with weak volumes since late 2006 and has been battered by the recession.</p><p>FedEx said that altogether it should record charges of $1.2 billion for the fourth quarter. The company said that apart from the $900 million goodwill charge, most of those charges have already been announced.</p><p>FedEx's main rival United Parcel Service Inc owns less-than-truckload company UPS Freight and shipping and office supply chain UPS Stores.</p><p>Both UPS and FedEx are seen as bellwethers of U.S. economic activity and have seen their shipping business hit by the recession.</p></blockquote><p></p>
[QUOTE="moreluck, post: 542545, member: 1246"] [B]FedEx to take Q4 $900mln charge as recession bites[/B] Wed Jun 3, 2009 5:16pm EDT * $900 mln goodwill charge, mostly for FedEx Kinko's * Charge due to weak economic conditions CHICAGO, June 3 (Reuters) - FedEx Corp said on Wednesday that it would record a fourth-quarter impairment charge of $900 million related to two acquisitions that have been hit by weak economic conditions. The majority of the charge is related to Kinko's, which FedEx bought in 2004 and has been seen as a disappointment by the package delivery giant. FedEx's announcement came in a regulatory filing with the U.S. Securities and Exchange Commission. The Memphis-based company said it would record a non-cash goodwill charge of $810 million for the quarter ending May 31 for the home office supply chain, which it bought in 2004 and re-branded first FedEx Kinko's and more recently FedEx Office. Kinko's has not performed well under FedEx, which analysts have attributed to the fact that it lies outside the package delivery company's area of expertise in the world of shipping. The remaining $90 million of the goodwill charge is related to the acquisition of less-than-truckload company Watkins Motor Lines -- now known as FedEx National LTL -- in 2006. Less-than-truckload companies consolidate smaller loads into a single truck. FedEx's acquisition of Watkins was welcomed by analysts at the time. But the business has suffered along with the rest of the U.S. trucking sector, which has struggled with weak volumes since late 2006 and has been battered by the recession. FedEx said that altogether it should record charges of $1.2 billion for the fourth quarter. The company said that apart from the $900 million goodwill charge, most of those charges have already been announced. FedEx's main rival United Parcel Service Inc owns less-than-truckload company UPS Freight and shipping and office supply chain UPS Stores. Both UPS and FedEx are seen as bellwethers of U.S. economic activity and have seen their shipping business hit by the recession. [/QUOTE]
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